Cablers' Outlook Not as Grim as Prime Time

Marketers Looking to Reach Under-12 Set Not Cutting Back as Severely

NEW YORK (AdAge.com) -- Early budgets for this year's kids' upfront indicate that kiddie cablers such as Nickelodeon, Cartoon Network and Disney Channel will experience less-severe cutbacks than their adult counterparts, with early projections pegging the kids' upfront market at flat to down 2% compared with last year's nearly $1 billion take.

That's a much softer blow than the general-market prime-time upfront, which media buyers who participated in last year's buying expect to be down between 5% and 7%. Last year, marketers committed $9.2 billion to the broadcast networks' prime-time schedules.

Source: TNS Media Intelligence

"The kids' market marches to its own drummer and is still very much governed by supply and demand," said Darcy Bowe, associate activation officer for Starcom USA. Cancellations for the kids' market's first big sales period of the year, pre-Easter, have been consistent with prior years, Ms. Bowe added, as have the networks' ad engagement. "Kids is the one place where there was really no falloff between commercial ratings. Commercials are still a part of the experience; they don't necessarily change the channel. They didn't have the loss of supply like we did in the adult marketplace."

Cartoon Network, which finished the fourth quarter of 2008 with a 17% increase in ratings among kids 2 to 11, is having a strong first quarter thanks to sustained spending from movie, fast-food and toy marketers. "I don't think anyone's exempt from the downturn, but the categories that drive our business are among the more recession-resistant," said John O'Hara, Cartoon's exec VP-ad sales and marketing.

Jim Perry, Nickleodeon's exec VP-ad sales, added that first-quarter scatter pricing is still growing on a year-over-year basis, albeit not at the rates of previous years. "The overall message we're getting is people are looking to place their ad money in the most dependable, reliable places they can find. It's a flight to quality."

Although full-year spending among virtually all of Nickelodeon and Cartoon Network's top clients was down from 5% to 10% due to budget cuts in the third and fourth quarters, the year-end totals aren't necessarily indicative of how much marketers spent in the upfront, which comprises an average 75% to 80% of a network's inventory.

The kids' market's relative strength is also contrary to paranoia that the Federal Communication Commission's 2007 crackdown on kids' marketing would cause major food marketers such as General Mills, Kellogg and Kraft to curtail their spending on sugary cereals and snacks. Instead, retooled marketing initiatives focused on exercise and more-healthful products kept many major food marketers' spending in 2008 at only slightly lower levels.

General Mills spent a combined $82 million on Cartoon Network and Nickelodeon in 2008, a 9% drop-off from the $91 million it spent on the top two ad-supported kids' networks in '07, according to TNS Media Intelligence. Kellogg spent a combined $53.7 million on both networks in '08, a 7.7% drop-off from its spending the year before. Compare that with Mattel and Hasbro, which each shed 10% of their marketing dollars on both networks last year. Elsewhere, Kraft, Burger King and McDonald's maintained or exceeded their previous spending on the networks by as much as $1 million.

General Mills will also be a launch sponsor of an ad-supported kiddie cabler, Disney XD, a rebrand of the former Toon Disney network that was set to relaunch in 72 million homes Feb. 13. With a focus on young boys, Disney is hoping to give the similarly targeted Cartoon Network a run for its ad money. But that may take some time, as predecessor Toon Disney's ad revenue was too small for TNS Media Intelligence to track. The Lego Group also has signed on as a launch sponsor for the network.

David Tepper, national broadcast buying group director at Group M's Mediacom, said Disney XD "should bring some competitive [gross rating points] into the ad-supported marketplace. The Disney brand is still hot, and being able to get your real ads next to some of that programming is definitely a worthwhile investment."

Clarification: TNS Media Intelligence data in this story reports advertising spending on Nickelodeon (excluding Nick at Nite) and Cartoon Network (excluding Adult Swim) for January through November 2008, not full year. TNS monitors Disney XD (formerly Toon Disney), which took in $76.9 million for the same period. Ad spending totals for all of 2008 were $939 million on Nickelodeon, $234 million on Cartoon Network and $84 million on Disney XD.

"SpongeBob SquarePants," "Back at the Barnyard," "iCarly," "The Mighty B"

DEMOGRAPHICS

Nick owns kids 2 to 11, ending 2008 with an average 1.2 million tykes tuning in throughout the day. It also scored well with tweens 9 to 14, upping its share of that audience 5%.

COMMERCIAL RATINGS

An average drop-off of 5% to 6%

HEALTH INITIATIVES

Nick's Let's Just Play initiative was backed by Kellogg, while Nick at Nite's "Kick One Pick One" program gets support from General Mills, Nestlé, Subway, Clorox and Johnson & Johnson.

KEY SELLING POINTS

Nickelodeon finished '08 with a 35% lead over Disney among kids 2 to 11, and gets more than twice the kids Cartoon Network reaches in total-day viewing.

BUYER'S TAKE

"Nick's strategy to offer at least one tentpole event like the Kids Choice Awards each month has paid off. Expansion of these stunts onto their other properties like nick.com, Turbo Nick and Nick magazine allows them to reach kids wherever they are."

Cartoon's sweet spot is boys 6 to 11, who helped "Star Wars: The Clone Wars" achieve double to triple-digit ratings growth in all three key demos in its Friday-night time slot.

COMMERCIAL RATINGS

An average drop-off of 8% to 9%

HEALTH INITIATIVES

Cartoon's Get Animated umbrella health initiative includes Spot the Block, a partnership with the FDA. The first half of '09 will see a healthy Happy Meal promotion from McDonald's as well as a new partner for the network's play promotion, Rescuing Recess.

KEY SELLING POINTS

Expect more movie studios, video-game makers and fast-feeders to flock to Cartoon following its fourth-quarter ratings ascension.

BUYER'S TAKE

"Cartoon's new nightly programming strategies and shows like 'Star Wars' and 'Ben 10' and 'Total Drama Island' have been successful as the network is showing ratings growth. Its commitment to new programming and online should help."

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Andrew Hampp

Andrew Hampp covers cable TV, out-of-home and radio for Ad Age, with additional coverage of music in marketing. He is also a regular contributor to Madison + Vine, the branded entertainment newsletter that ships every Thursday. Andrew is always looking for untold trend or case study stories from the out-of-home and radio industries, and welcomes table-side meetings with people in these sectors to discuss how their work can fit into his coverage. He prefers contact by e-mail, but can also be reached by phone.